Microsoft in Trouble

[Zeeble]

I read the Times today that MS is in the process of being fined by over 400 million euros for breachng competition laws.

 

[DN Tycoon]

I don't believe the EU is doing this because of the US foreign policy decisions, I was simply throwing out that idea into the discussion because let's face it it is not an impossible scenerio. I agree with you on the small fines on billion dollar companies but the fine is simply absurd and IMO has a deeper motive which again is not a far fetched conclusion. The EU has other avenues that they can pursue to punish MS, I say if they are so serious about this to fine them $606 million then pull out the big guns and really put the pressure on because we all know this outrageous fine will never be paid and MS will delay this and it's all a waste of time..IMO other forms of punishment need to be in place. On the otherside of things I think Ms bundling their MP with WXP is no big deal unless they make their OS only comptiable with MP and not Realplayer, Quicktime and others. If you don't like MP then you can remove it and use another, I prefer Realplayer over MP anyway but I use both because some files work better on one than the other. Why not fine Realplayer for having their own movie format that will only play on their player...this type of discussion has many forks in thr road and can go on forever and I will be here to discuss it every step of the way...BTW you guys bring good points to the table...

 

[JMJ]

It all boils down to the old saying. "If you can't take the heat, then stay out of the kitchen." Are they going to use this money to start up a non-profit company which will compete with micorsoft? Hell no, they will build a few more roads, put some new computers in classes running Microsoft windows, etc. So what does the fine actually do? Even if Microsoft didn't pay and pulled all of it's distibution the "consumer" would still buy it, it just might have to be bought overseas. Or wait would they put a ban on the use of the product and anyone found using it would get their fingers chopped off. Give me a break. This is just another example of why governments should stay out of business affairs unless said business in some way harms someone.

 

[Zeeble]

It all boils down to the old saying. "If you can't take the heat, then stay out of the kitchen." Are they going to use this money to start up a non-profit company which will compete with micorsoft? Hell no, they will build a few more roads, put some new computers in classes running Microsoft windows, etc. So what does the fine actually do? Even if Microsoft didn't pay and pulled all of it's distibution the "consumer" would still buy it, it just might have to be bought overseas. Or wait would they put a ban on the use of the product and anyone found using it would get their fingers chopped off. Give me a break. This is just another example of why governments should stay out of business affairs unless said business in some way harms someone.

I do not think that Gov. should stay out of business. Business NEADS regulation, or we would have monopolies all over the place, and we the CONSUMERS would NOT benefit. Only a few companies i.e the big ones would benefit.

Tycoon, you have a valid point in saying that you can remove WMP and replace it with something else, however I believe that this goes way beyond that, you see MS has created a monopoly by making people rely on its services. 100% of school children grow up with MS Windows in School, this means that they become accustomed to it, and therefor employers also need to use the software. MS then uses this monopoly position. Also, the average Joe, who picks up a Dell computer at his local PC shop, does not know much about computers, and uses it mostly just for surfing and word processing, without being aware that alternatives exist.

 

[octobus]

typo

Have any of you familarized yourselves with elementary micro economics?

If you haven't, I would suggest you to do so. In particular in the area that concerns monopolies for this discussion. First of all a monopoly (in almost every situation) is harmful for the following reasons:

1. It is both allocatively and productively inefficient.
2. It increases prices and reduces output.

Market regulations are part of a well funtioning laissez-fairez economy (free economy). What if tobacco or alcohol was not taxed? Where would the cost of consuming them be included and who would pay for it? Sometimes there has to be action from governments to regulate monopolies and include market failures in prices (e.g tobacco consumption).

 

[DN Tycoon]

This is the part that confuses me, nobody is forced to use any program out there. It's just as easy to use Real Player as it is MP..schools can replace MP with RP or QT or even better use all 3 to give the kids a more balanced education on these programs. I see the raw reason why people are concerned I just sometimes wonder if the governments are doing it for the right reason. Sublime is right about using the money, the money from the fine should goto some non-profit org and not to repair roads or put extra money in the politicians pockets. If I was MS I would just raise the price of WIndows and make product addons such as WMP seperate because in the end we the consumer will be forced to pay more as always.

 

[adam_uk]

"If I was MS I would just raise the price of WIndows and make product addons such as WMP seperate because in the end we the consumer will be forced to pay more as always."

no way! if you raise the price of software and take extras away such as wmp thats suicide. i will never pay for addons for microsoft. winamp, qt, rp, itunes do the job just as well. so why should i pay? they would end up loosing money on wmp. its just not feasable.

im ready to axe windows as soon as i get my dual screens working. then im gone. linux is getting more and more user freindly and will begin to take more of a hold.

 

[DN Tycoon]

"no way! if you raise the price of software and take extras away such as wmp thats suicide. i will never pay for addons for microsoft. winamp, qt, rp, itunes do the job just as well.

Exactly my point, thank you. Until Linux becomes more newbie friendly and compatible with at least 80% of the software MS Windows is it has a far shot to go. With so many flavors of the OS it's very confusing to a newbie and the idea of Linux being bundled in a new pc being common is almost slim to none. What we need a is brand new OS from scratch that doesn't shadow Windows but for whatever reason no company has done this or even attempted as far as I know.

 

[Peter]

the reason no company has attempted it is because they would nearly have 0% chance of success. That is the whole point, because MS has such a dominance in the market it means that no other company unless they have the funding to mass market and develop the product it will fail. and lets face it what company has the funding avenues that could compare to MS.

Linux is the only way forward in my opinion at the moment but as mentioned there is alot of work needed before it is anywhere near possible to bundle with standard pc's that you buy at your local pc world. it is very awkward to install software and can be very annoying to use. I used to run linux on my home PC but found it way too much of a hassle to install a piece of software, I was constantly having to find packages that something I was trying to install was dependant on, it became ludicrous, 1 package required another which itself required another and so on but alot of them couldnt be found even on the redhat database.

 

[DN Tycoon]

This what I am saying, some billion dollar company needs to create an OS from the ground up making it as solid as Linux and as friendly as Windows...a new approach to the Os that we are used to now. You say 0% chance but the truth is if it is half linux half windows based on different code then they have a great chance to take a chunk out of the market because alot of people for whatever reason dislike MS and alot of people don't know how to use Linux or think it's to much of a pain. People love new things such as Google w hen it came out and with the new MSN search....it can be done it's just the matter if some company wants to do it.

 

[theparrot]

What would happen if someone discovers opensource code within MS source?

Discovers? It is already known to be there.

Also, as I said before, MS deserves to be fined because it has brocken competition laws, if this was not the case then the EU would not try to fine. It has nothing to do with the fact that MS is a US company, its purely and simpley that they have brocken the law.

If you believe this, you really have not stepped back and looked at the big picture, nor thought much about why governments really do what they do!

In this case the lines are pretty clear. Microsoft as a new company did not know how to play the political game. They , naivly is turns out, thought that their job was to be a business and let the government do it thing while they did theirs. They got asked to contribute, and did not give 'enough'. The govenment turned the dogs lose on them. The EU saw this and said, me too.

Lee, you DID imply that the EU was only targetting MS to help itself and because its a US company.
As Octobus has said, MS has been unfair in the way that it has dealt with the market that it operates in. MS has a monopoly BECAUSE we are so used to MS products. We start learning on MS OS when we are at school, and use it (most people) for the rest of our lives.
That is against competition laws, which have been put in place to PROTECT us.

It is against competition laws to starting learning on an MS OS? Isn't it in this case the schools that are to blame? Start a school that teaches on a better os, and or get the government schools to not buy and use MS OSs then.

 

[Peter]

Isn't it in this case the schools that are to blame? Start a school that teaches on a better os, and or get the government schools to not buy and use MS OSs then.

Thats a new 1 schools are to blame for microsofts dominance wonder if their lawyers will use that argument the next time they are in court.

 

[Zeeble]

Have any of you familarized yourselves with elementary micro economics?

If you haven't, I would suggest you to do so. In particular in the area that concerns monopolies for this discussion. First of all a monopoly (in almost every situation) is harmful for the following reasons:

1. It is both allocatively and productively inefficient.
2. It increases prices and reduces output.

Market regulations are part of a well funtioning laissez-fairez economy (free economy). What if tobacco or alcohol was not taxed? Where would the cost of consuming them be included and who would pay for it? Sometimes there has to be action from governments to regulate monopolies and include market failures in prices (e.g tobacco consumption).

Thank you! That is why monopolies are illegal. Companies such as MS don't just make a mistakewhen turning into a monopoly, it was a deliberate process.

 

[adam_uk]

Thats a new 1 schools are to blame for microsofts dominance wonder if their lawyers will use that argument the next time they are in court.

i can see where he is coming from though

at work our network is a pure business server 2003 / xp network. the kids at school know this, and when they leave school they wont go for a mac, or go for a linux box theyll head straight to the nearest hp computer stuffed with windows xp. then the process repeats.

out of 700 machines at work, 2 or linux based (one being my mac, the other being my proxy server at work)

youll see more users imho using non ms based systems when schools start to realise there are more to computers than rm and microsoft.

 

[Zeeble]

Yes exactly, that is the problem. Because businesses use MS, Schools also have to because it is the standard. So as Adam said the process repeats itself.

 

[Veolus]

I read the Times today that MS is in the process of being fined by over 400 million euros for breachng competition laws.

That's nothing new :D Microsoft will do anything to stay on top of the competition :bingo:

 

[Zeeble]

That's nothing new :D Microsoft will do anything to stay on top of the competition :bingo:

Thats true, but I only heard of when they got fined for 60 million. So 400 million fine is new to me.

 

[theparrot]

Thank you! That is why monopolies are illegal. Companies such as MS don't just make a mistakewhen turning into a monopoly, it was a deliberate process.

MS is not a monopoly. Name one product class they make I can not get elsewhere.

In fact name one monopoly that is not actually government granted.
Now tell me again why they are illegal, at least the any in an economic sense. Since they would not exist without the government grants of so called natural monopiles (typically granted with utilities) what again is the real point of these laws?

Follow the money as they say.

Thats a new 1 schools are to blame for microsofts dominance wonder if their lawyers will use that argument the next time they are in court.

Ah, but it does show the real motivation of these trials. If the goverment really cared about the monoply aspect of it they could do far more good and cost far less money and opertunity costs by simply having the schools teach alternative products. follow the money as they say.

 

[armstrong]

If the goverment really cared about the monoply aspect of it they could do far more good and cost far less money and opertunity costs by simply having the schools teach alternative products.

China did exactly this for a while, after a particularly determined anti-paracy campaign by MS. Microsoft's answer? They placed their anti-piracy drive on hold, and created Chinese-version MS software priced much, much cheaper.

 

[theparrot]

And do you see that as supporting or opposing my statement?

 

[armstrong]

AGREE: If government wanted, they could soften the MS "monopoly" by requiring alternatives like opensource in schools.

DISAGREE: "MS is not a monopoly. Name one product class they make I can not get elsewhere." They are effectively a monopoly, since no one else can produce Windows. This alone would not have been taken against them, except that they have been proven to have used this monopoly of the OS market to drive away competitors (and thus stifle innovation) in other software categories, such as internet browsers and music players.

 

[theparrot]

monopolies

I was talking about that specic statement about the chinese action.

But anyway,

Ah, but windows is not a product class it is an instance of a product class.
The product class is operating systems. A monopoly is not one who has a large market share. A monopoly is one that offers no other choices.

I have used many OS's over the years, and still use other OSs then windows more often on a daily basis. The choice is there. The plain fact of the matter is people are generally lazy. If they can get all the stuff they want pre installed at a low price they take it even if it does give all the business to one company. In fact even for services people like a bundle where they pay one bill. It is possible to write another OS (NetBSD, OS/2, VMS, Unix, OS/9. BeOS spring to mind off the top of my head) and people have the choice to use them. The fact they pay a 'price' in doing so other then money (this being time to find and install, or pay someone to do so, the alternatives) is not relavant to it being a monopoly in an econmic sense. I could live quite happly never using MS software and I am sure more people could then think so.

Another thing is, lets say it is a monopoly, why should the results of that be that the government gets more money? How does that fix anything? Are they doing things like funding public domain works with that money? No, they are using it like a tax.... they hide behind the monopoly word to create a new form of tax. In fact the government loves monopolies, they are much easier to regulate , control and tax then a free market segment.

 

[armstrong]

Another thing is, lets say it is a monopoly, why should the results of that be that the government gets more money? How does that fix anything?

The fine was imposed to discourage MS from using its OS clout to stifle competition in non-OS products. This will be done by allowing access to MS source (to better optimize these 3rd party apps), and by allowing PC sellers to preinstall non-MS software without being penalized by MS in terms of price discounts. The first EU fine was small. The fine this time around is sizeable enough to make MS take notice. I assume if they continue ignoring the anti-monoply guidelines that the next fine would really draw blood.

 

[theparrot]

The fine was imposed to discourage MS from using its OS clout to stifle competition in non-OS products. This will be done by allowing access to MS source (to better optimize these 3rd party apps), and by allowing PC sellers to preinstall non-MS software without being penalized by MS in terms of price discounts. The first EU fine was small. The fine this time around is sizeable enough to make MS take notice. I assume if they continue ignoring the anti-monoply guidelines that the next fine would really draw blood.

I guess I do not believe the rehtoric. I think the fine was imposed because it could be. At no point has MS stuck a gun at me and said to buy their products. Now in this case the goverment is using threat of force to steal part of the value of their products, and part of the profits, while having done none of the work. Sorry, but if the real reason was what they claim, they have much better , more honest ways to do so.

 

[armstrong]

True, government has many tools at its disposal, one of them being fines. Why not fines? It should work eventually, and it denies companies the use of ill-gotten funds.

At no point has MS stuck a gun at me and said to buy their products.

Maybe not at you, but they did stick their proverbial big guns on PC sellers and say, "do what we want or else." PC sellers who refuse to cooperate would be unable to compete with those who toe the official MS line.

 

[octobus]

Ah, but windows is not a product class it is an instance of a product class.
The product class is operating systems. A monopoly is not one who has a large market share. A monopoly is one that offers no other choices.

The last time I checked there was only one provider of Windows OS. Thus Microsoft has a pure monopoly thanks to producing %100 of the market output.

Some general characteristics of a monopoly firm:

A single seller
(Microsoft)

Produces branded goods
(MS Office, Windows and etc)

Creates barriers to entry
(e.g Windows source code is not licensed to third parties)

Maximizes profits
(look at revenue/profit for Microsoft Corporation. NOT a single firm in a monopolistic competition can have such ratios, ONLY a firm with a monopoly can sustain such profit level in the long term.

At no point has MS stuck a gun at me and said to buy their products. Now in this case the goverment is using threat of force to steal part of the value of their products, and part of the profits, while having done none of the work.

So if you want to play a DirectX game (like almost all PC games). how many OS choices do you have. It's not a question of someone using a gun to force buy their products, that is not a condition for a monopoly. In addition the value of of their products is partly superficial, because of lack of any competition. So to say that government is stealing value of their products...
First of it's not even true. A fine is not a tax. Those are two completely different things.

Using your logic with monopolies, Standard Oil's monopoly should have left intact. Neither did Rockfeller force his customers to to fill the tank at gun point.